DESCRIPTION (Applicant's Abstract): This is one of two identical applications (except for budget/personnel) submitted as a two-site multi-institutional research project. The two principal investigators are Robert J. DeRubeis, Ph.D., of the University of Pennsylvania, and Steven D. Hollon, Ph.D., of Vanderbilt University. Cognitive therapy (CT) and pharmacotherapy (PT) are both widely researched treatments for major depressive disorder. This addresses five critical public health questions: 1) Is CT as effective as PT in the acute treatment of depressed outpatients? 2) Is CT more effective with mild and moderate depression and PT more effective with severe depressions? 3) Does CT prevent the return of symptoms following successful treatment? 4) Are there cognitive or biological markers that can predict differential response to these treatments? 5) What are the processes and mechanisms that account for the clinical effects of these treatments? These question will be addressed in an outcome study in which 288 nonpsychotic, nonbipolar depressed outpatients (half at each of two sites) will be randomly assigned to CT, PT, or pill placebo (PP). Acute response will be assessed across a 16 week active treatment period (eight weeks only for PP). Steps will be taken to ensure that all treatments are delivered with consistent, high quality. The PT condition entails the use of paroxetine, augmented by lithium carbonate after eight weeks for those patients who do not respond to desipramine by that time. At the end of the 16 week period, responders to PT will be randomly assigned either to continuation PT or to withdrawal onto a pill placebo; responders to CT will be withdrawn from treatment at that time. All responders will be followed across a 12 month continuation phase (embedded within a 24-month follow-up) to assess differential relapse. Cognitive predictors and mediators of response and relapse will be examined. The main hypotheses are: (a) short term CT and PT will yield comparable acute effects irrespective of patient severity, and both will be superior to PP, at least in the more severely depressed subsample; (b) short-term CT and continued PT will be comparable in the prevention of relapse, and both will surpass continuation pill placebo in this regard; (c) measures of depressive schemas and of compensatory (coping) skills will change more in CT than in PT, and these changes will mediate the acute response to CT, as well as any preventive capacity of CT; and (d) both modality-specific components of CT and nonspecific relationship factors will predict response to CT, whereas only modality specific components will predict subsequent relapse.